M1 Finance Review 2023: Pros and Cons

M1 Finance offers a unique and free automated investing platform (a “finance super app”) with auto rebalancing and more.
M1 Finance
  • Fee-free investing
  • Customization of investments
  • Rewards credit card users
Overall Rating 4
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The Penny Hoarder Overall Rating
Fees starstarstarstarirc_half_star
Portfolio mix starstarstarstarstar
Cash Management Account starstarstarstarstar
Customer experience starstarstarempty starempty star
This is a informational card about M1 Finance, a free investment tool, which gives it an overall rating of 4 stars.

M1 Finance is a fee-free way to invest that lets you be as hands-on or hands-off as you want to be. The M1 Basic account is completely free (minus the typical fees associated with investing), but you can unlock even more potential out of M1 Plus, which is free for the first three months and then $125 thereafter. Supported investment accounts include individual and joint taxable accounts, retirement accounts and event trust accounts.

Both M1 Basic and M1 Plus go beyond traditional investment accounts with cash management options like Borrow (loan) and Spend (checking) accounts that fit in nicely with the portfolio. M1 Plus members even have access to the special Owner’s Rewards Card by M1, with up to 10% cash back.

In our M1 Finance review, we’ll start with a quick comparison of M1 Basic and M1 Plus, then dig into each of the components of an account: investing, retirement, checking, loans and the credit card.

M1 Finance Basic

Best for Basic Investing

4 out of 5 Overall

Key Features
  • No annual fee
  • 1 ATM reimbursement per month
  • $100 minimum investment
The M1 Basic account through M1 has no monthly management fee and is great for beginners. If you aren’t sure that M1 is right for you long term, start with this account and upgrade to M1 Plus down the road if you’re satisfied.
M1 Finance Basic

Trading commissions
Borrow rate
Checking account APY
Credit card
$0 a year (if you open one)

More Information About M1 Finance Basic

The no-frills M1 Basic account from M1 Finance boasts $0 trading commissions with an AM-only trading window. With M1 Basic, you can still open a checking account (Spend) and take out a personal loan by borrowing on margin (Borrow). You just miss out on lower borrowing rates, checking rewards and the rewards credit card.

The Borrow account comes with a 6.25% rate and requires a $2,000 minimum balance. The Spend account has a $0 minimum balance requirement, 0.8% to 1.0% international fees and one monthly ATM fee reimbursement.

You can get the Owner’s Rewards Card, a rewards credit card for M1 customers, with just the basic account, and as of August, 2022 the card has no annual fee. If you just go with M1 Basic, this will serve you well as an investment account (the lack of fees is the big appeal), but you should seek out a bank account elsewhere. We almost always advise against margin trading and loans, so the high loan rate on the Borrow account shouldn’t be a concern.

M1 Finance Plus

Best for Account Extras

4.5 out of 5 Overall

Key Features
  • $125 annual fee
  • 4 ATM fee reimbursements per month
  • $100 minimum investment
The M1 Plus account through M1 may cost $125 a year (first three months are free!), but the perks that come with the account are well worth the cost for those who will take advantage of them: cash back debit card, high APY on checking, lower interest rate on margin loans, larger trade window and rewards credit card.
M1 Finance Plus

Trading commissions
Borrow rate
Checking account APY
3.30% APY
Credit card
Earn up to %10 cash back

More Information About M1 Finance Plus

When you upgrade to the M1 Plus account, you’re getting far more than a basic investment platform; you’re getting a banking experience that rewards you for spending (plus more competitive borrowing options).

For starters, M1 Plus gets you AM and PM trade windows, rather than just AM. The minimum balance for the Borrow account is still $2,000, but the rate drops to 6.25%. Again, we typically advise against margin trading for the average investor, though you can also use the loan to pay for other expenses.

The Spend account is far more attractive with M1 Plus. For starters, you’ll get 3.30% APY on your checking, which is more competitive than most banks’ savings accounts. On top of that, you will pay no foreign transaction fees, get four monthly ATM fee reimbursements and can send paper checks from the M1 app. And did we mention 1% cash back on debit card purchases? With checking rewards this good and your own investment account, you could do away with a traditional savings account altogether.

M1 Plus members can also apply for the Owner’s Rewards Card by M1, a rewards credit card that incentivizes shopping with merchants that you’ve invested in. While M1 Basic members also pay no annual fee for this card, M1 Plus members access higher  cash back rewards ranging from 2.5% to 10% with a maximum reward value of $200 per month (or $2,400 per year). Those rewards are then automatically reinvested in eligible accounts.

M1 Finance Review: Key Features

Below, we’ve spelled out the fine print of each part of an M1 Finance account. Look for Our Take at the end of each section for a quicker read.

M1 Invest

The M1 Invest platform includes automatic rebalancing of your accounts, which means the investment platform will automatically manage your investments (selling and buying various individual stocks, ETFs, bonds, etc.) to keep your account proportioned how you want it (based on your risk tolerance, preferred asset allocation and investment goals). The auto rebalancing feature also includes tax loss harvesting.While automatic rebalancing is a common feature among robo advisors like M1 Finance, the option for fractional shares is a little more unique and a hard sell. Fractional shares allow you to buy into part (i.e., a fraction) of stocks and ETFs (exchanged-traded funds) that might otherwise be too expensive for you to invest in.

The selling point of an Invest account with M1 is “The Pie.” This is M1’s solution for easy portfolio management. You can create custom pies via an interactive dashboard that lets you browse 6,000+ individual stocks and ETFs to truly customize your investment portfolio. But if you don’t have the time or knowledge to customize your portfolio, you can select from “Expert Pies” that the M1 Finance team has “baked.” With more than 60 curated Expert Pies, there is likely to be one or more that suits your investment strategy and risk tolerance.

Some examples of Expert Pie categories include:

  • General Investing
  • Plan for Retirement
  • Responsible Investing
  • Income Earners
  • Hedge Fund Followers
  • Industries & Sectors
  • Just Stocks & Bonds

M1 Community Pies

A big reason we love M1 is the ability to choose from Community Pies. These allow you to find and share portfolios that align with your personal values. For example, you can build and invest in pies that focus on publicly traded companies led by Black, female, LGBTQ+, AAPI or Latine executives. You can also find a Community Pie focused on sustainable businesses.

You can make your portfolio as diverse as you’d like with M1, with access to stocks, bonds, index funds and exchange-traded funds. If most of this goes over your head, however, you will benefit from the Expert Pies already fresh out of the oven and served up for you.

Note: There is a $100 investment minimum for M1 Invest.

M1 recently introduced cryptocurrency trading to its platform. With the new interface, you can access commission free trading, custom portfolio Pies, and even weekend and on-demand options. If you’re interested in adding crypto to your investment strategy head to the website and look for the M1 Crypto page for up-to-date details.

Our Take: For those who want hands-off investing through a robo advisor, rather than a real human financial advisor, M1 Finance is a great platform. And if you learn more about the market and want to play a more direct role in your investment strategy, the customizable Pies allow you to do so without needing to close your M1 account. If you simply want the investment aspect of M1 (and don’t care about the Spend and Borrow portions), we recommend the free M1 Basic account.

M1 Retirement

The M1 Invest platform is designed for investing in the stock market for goals of any length, but you can also specifically open tax-advantaged accounts for your retirement. M1 has options for an IRA, a Roth IRA and even a SEP IRA.

These accounts share the same benefits of a traditional investment account with M1: access to Expert Pies, fractional shares and auto rebalancing. If you already have an IRA or 401(k) elsewhere and would like M1 to manage it, you can roll over your account.

Our Take: Try out M1 Invest first to make sure you are satisfied with the platform. If, after a few months, you find this robo advisor is the right match for you, roll over your retirement accounts to keep them under one roof. But if you are happy with how your retirement account portfolio is being managed elsewhere (and the fees are negligible), it’s perfectly fine, albeit a little more confusing, to have the accounts managed separately elsewhere.

M1 Borrow

M1 Finance is a portfolio line of credit, meaning it offers its customers a flexible line of credit that is borrowed against their own investments. Use it to start a business, fund a wedding or as a down payment on a house. There is no application involved and no payment schedule, and it takes just three clicks to borrow.

You can borrow up to 40% of your account value. Rates are 6.25% for M1 Plus members and 7.75% for M1 Basic members. This is an ideal scenario if you have high-interest loans, like student loans or credit card debt, that you would like to pay off; then you’d have a more manageable loan to pay off via M1.

This could also come in handy if you do not have the means to save toward an emergency savings fund. Instead, take out a low-interest personal loan through M1 Borrow to avoid high-interest medical debt or credit card payments.

However, margin loans can be dangerous. M1 has its own margin account risk disclosure that everyone should read before opting in.

Our Take: Never borrow unless you have to. Don’t take out a loan just to have some cash to play with. That said, if taking out an M1 Borrow loan can eliminate monthly payments on predatory loans, take advantage of this option. Just know the risks of margin accounts and how they differ from traditional personal loans.

M1 Spend

You can also utilize cash management account features via M1, which is a more recent addition to the platform. The M1 Spend account is ideal if you are an M1 Plus member because of the extra perks. We do not recommend the Spend account as a checking account alternative to those using M1 Basic.

M1 Plus customers with a Spend account will get the following cash management features:

  • 1% cash back on debit card purchases
  • 3.30% APY on your cash balance
  • Four ATM fee reimbursements each month
  • 0% foreign transaction fees

Other notable features of the Spend account (for both M1 Basic and M1 Plus) include early direct deposit access and a $0 account balance minimum. Both accounts come with the M1 Spend Visa debit card, but again, only M1 Plus members get the 1% cash back perk.

M1 Plus members can also set up smart transfers; if your cash balance in the Spend account hits a certain threshold, M1 will automatically transfer and invest it.

Because M1 is not a bank but a brokerage, it partners with Lincoln Savings Bank to service its bank account. This means it gets the traditional $250,000 Federal Deposit Insurance Corporation (FDIC) insurance.

Plus, with a high-yield savings option rolling out later this year, M1 Plus members get 4.50% APY with no minimum deposit. Check the M1 website for more information.

Our Take: This Spend account is much better than a lot of the high-interest checking accounts from other online banks. However, you do have to pay to get these perks. If the cash back and APY will more than cancel out the cost of the account, this is a must-have for M1 Plus members.

M1 Credit Card

The Owner’s Rewards Card by M1 is a standout feature if you have the M1 Plus account. With the card, you can earn cash back on purchases with brands that you’re invested in; the standard cash back is 1.5%, but select brands offer 2.5%, 5% or even 10% cash back.

Some of these popular brands include Apple, Amazon, Walmart, Target, Spotify, Netflix, Popeyes, T.J. Maxx, Converse, Delta and Starbucks.

You can even choose to reinvest this cash back into your portfolio for continued growth.

The credit card account comes with a contactless metal card with tap-to-pay.

Our Take: If you want a rewards credit card and plan to invest with M1, this should absolutely be on the top of your list. Even if you have another rewards credit card, the 10% cash back on select merchants is too good to pass up. You could even open this credit card and only use it when you’ll get the 10% cash back if you have another rewards credit card to utilize in other scenarios.

What Assets Can You Invest in with M1 Finance?

M1 Finance is a diverse trading platform with a wide range of securities available. With M1, you can invest in:

  • Stocks
  • Exchange-traded funds
  • Bonds
  • OTC securities

Right now, M1 Finance has over 6,000 stocks and ETFs on the New York Stock Exchange and NASDAQ to choose from and even gives M1 customers the chance to suggest new securities be added to the platform. Now that M1 Crypto has launched, members are able to trade cryptocurrency on-demand.

M1 does not allow you to invest in mutual funds and options. If this is important in your investment strategy, you may want to handle your retirement accounts elsewhere.

M1 Finance Fees

The M1 Basic account has no annual fee while the M1 Plus account costs $125 a year (the first three months are free). While other investment platforms often charge you commissions on trades, M1 Finance is truly fee-free.

However, you will pay fees for some less common tasks, like paper statements, outgoing account transfers and account inactivity. These are all very transparent on the M1 site, and it is not likely the typical customer would be paying these fees.

The full rundown on M1 fees:

M1 Finance App

As an online robo advisor, M1 Finance offers a great online platform that is relatively easy to use once you get used to it. Even more important, M1 offers a mobile app that is ideal for tech-savvy investors.

Within the app, you can buy and sell individual stocks and ETFs; set up smart transfers (rules that automatically move money within your account); and manage your Borrow and Spend accounts.

At the time of publishing, the M1 mobile app had over 50,000 ratings on the Apple App Store with a star rating of 4.7. On Google Play, it has more than 21,000 reviews and a 4.5 star rating.

M1 Finance Customer Support

M1’s client success team is available from 9 a.m. to 4 p.m. ET on any day the U.S. stock market is open. The limited access to customer support agents can be difficult, especially for those accustomed to 24/7 customer service.

Because M1 is a robo advisor, you cannot contact financial advisors for investment advice or personal finance advice. If you need more tailored investment advice, consider a company with physical locations or real human advisors.

M1 Finance Safety

M1 Finance provides a number of reassurances to customers. The checking account is insured by the FDIC, and the company is a member of the Securities Investor Protection Corporation (SIPC), which protects securities in your account up to $500,000. Finally, M1 Finance is a technology-first company, meaning you can expect the latest information security features on the app.

M1 Finance Pros and Cons

If our M1 Finance review has not given you a clear decision on whether to invest quite yet, check out these pros and cons of M1 Finance.

  • Automatic rebalancing for preferred asset allocation
  • Fractional shares
  • Hands-off investing for beginners
  • More customization for advanced investors
  • Cash back debit and credit cards
  • High-interest checking account
  • Low-rate loans

  • No checking account perks for M1 Basic account
  • $125 fee for the M1 Plus account
  • No mutual funds or options
  • No access to human financial advisors

Frequently Asked Questions (FAQs) About M1 Finance

Still have some questions about M1? Here’s what other readers like yourself are asking—and the answers to those questions:

Is M1 Finance Trustworthy?

M1 is a trustworthy automated investment platform. M1 is a registered broker/dealer with FINRA (Financial Industry Regulatory Authority) and a member of SIPC (Securities Investor Protection Corporation).

In addition, your funds in the Spend account are insured by the FDIC (Federal Deposit Insurance Corporation).

What are the Cons of M1 Finance?

M1 Finance’s pros far outweigh the cons; however, we have determined a few downsides to M1:

  • There is currently no savings account, but M1 has announced a launch for later in 2023.
  • There are no checking account perks for an M1 Basic account.
  • To unlock the checking account perks, you must pay the $125 fee for the M1 Plus account.
  • You can’t invest in mutual funds or options.
  • There is no access to human financial advisors.

Is M1 Finance Good for Beginners?

M1 Finance is a free automated investing platform. The M1 Basic account is free, and there are no commissions on trades. However, the M1 Plus account is $125 a year, though the first three months are free.

Is M1 Finance Really Free?

M1 Finance is a free automated investing platform. The M1 Basic account is free, and there are no commissions on trades. However, the M1 Plus account is $125 a year, though the first three months are free.

Should I Get M1 Plus?

If you plan to take advantage of the M1 Borrow loan, the perks of the M1 Spend checking account and/or the cash back from the M1 credit card, paying $125 a year for an M1 Plus account makes a lot of sense.

Is M1 Finance a Bank?

M1 Finance is a brokerage account, but it also operates a digital bank account with cash management account features like a checking account. The checking account is interest bearing if you pay for an M1 Plus account. However, you cannot apply for auto loans or home loans. In that sense, it does not operate like a traditional bank.

Does M1 Finance Offer Tax Loss Harvesting?

Yes, M1 offers tax loss harvesting. Tax efficiencies are built into the M1 robo advisor platform.

Timothy Moore covers bank accounts for The Penny Hoarder from his home base in Cincinnati. He has worked in editing and graphic design for a marketing agency, a global research firm and a major print publication. He covers a variety of other topics, including insurance, taxes, retirement and budgeting and has worked in the field since 2012. Freelancer Veronica Matthews contributed to this report. 

Investing in securities involves risks, including the risk of loss. M1 Finance LLC is an SEC registered broker-dealer. Member FINRA/SIPC.

Borrow rate may vary. Borrowing involves additional risks, including the risk to lose more than deposited. Not available for retirement, custodial, or trust accounts.